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Denver must take another shot at affordable housing

Denver Mayor Michael Hancock addressed affordable housing in his 2013 State of the City address on July 15. (Cyrus McCrimmon, The Denver Post)

Over a decade ago, we supported the passage of a city ordinance that was meant to spur construction of affordable housing in Denver.

We believed then, as we do now, that working people who make this city run — including service workers — should not be forced to live outside Denver as development caters to only the relatively well off.

But we readily acknowledge what Mayor Michael Hancock and city councilors have admitted: Denver's inclusionary housing ordinance has not accomplished nearly enough and now needs an overhaul.

Under the ordinance, developments with 30 or more for-sale units must designate 10 percent of the units as affordable, meaning people earning less than the median income for Denver can handle the mortgages.

Developers can get cash rebates of $5,500 per affordable unit in return. However, many developers instead choose to exercise a provision in the ordinance allowing them to opt out and make payments to the city instead, deciding it's not financially prudent to sell some properties below market rate even with rebates.

While there have been some successes over the life of the ordinance, the measure needs to be reworked.

Councilwoman Robin Kniech said this could include changing the 30-unit requirement so smaller projects could be built with the incentives and giving developers more flexibility for alternative projects that could expand the affordable housing supply.

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One huge challenge is that, unlike some cities around the country, Denver's ordinance applies only to for-sale properties, not rentals. That's because of court decisions that have said such requirements on rentals violate a state ban on rent control.

Denver instead attempts to use financial incentives to encourage developers to build properties with affordable rents. But those incentives are fueled heavily by federal funds that are dwindling.

Kniech says the city must explore using local revenue sources to help fill the gap. That could take many forms, but we'd have to see a proposal first before deciding whether it was worthy of support.

As hard as it is to spur construction of affordable housing, Denver can't give up on that goal.

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